Long-Term Debt

Except as described below, the Company did not have any significant changes to its long-term debt as disclosed in the notes to our consolidated financial statements included in the Form 10-K.

Long-term debt consisted of the following:



	September 29, 2013			December 30, 2012
Term A Loan, due in 2018	$	350,000		$	—
Term B Loan, due in 2019	769,375			1,114,826
6.20% Senior Notes, due in 2014	225,586			225,940
7% debentures, due in 2025	84,373			83,496
Capital lease obligations, due through 2040	37,538			32,594
Other (a)	5,050			706
	1,471,922			1,457,562
Less amounts payable within one year	(38,260		)	(12,911		)
Total long-term debt	$	1,433,662		$	1,444,651

_______________

(a) Other includes $4,696 of debt resulting from the consolidation of the Japan JV in the second quarter of 2013. The carrying amount of the long-term debt approximates fair value.

Refinancings of the Credit Agreement and Other Indebtedness

On May 16, 2013, Wendy’s amended and restated (the “Restated Credit Agreement”) its Credit Agreement, dated as of May 15, 2012 (the “Credit Agreement”). The Restated Credit Agreement is comprised of (1) a $350,000 senior secured term loan facility (“Term A Loan”) which will mature on May 15, 2018 and bears interest at the Eurodollar Rate (as defined in the Restated Credit Agreement) plus 2.25%, (2) a $769,375 senior secured term loan facility (“Term B Loan”) which will mature on May 15, 2019 and bears interest at the Eurodollar Rate plus 2.50% with a floor of 0.75% and (3) a $200,000 senior secured revolving credit facility which will mature on May 15, 2018. The proceeds from the Term A Loan were used to refinance a portion of our existing Term B Loan (formerly described in our Form 10-K as the “Term Loan”). The terms and amounts of the senior secured revolving credit facility are unchanged with the exception of the maturity date which was extended from May 15, 2017.

During the three months ended June 30, 2013, Wendy’s incurred $5,579 in fees related to refinancing activities, which are being amortized to “Interest expense” utilizing the effective interest rate method through the maturities of the related debt instruments.

As a result of the refinancing of its existing Credit Agreement, described above, Wendy’s incurred a loss on the early extinguishment of debt as follows:



	Three Months Ended		Nine Months Ended
	September 29, 2013		September 29, 2013
Unaccreted discount on Term B Loan	$	—	$	9,561
Deferred costs associated with the Credit Agreement	—		11,458
Loss on early extinguishment of debt	$	—	$	21,019

The Company incurred a loss on the early extinguishment of debt in 2012 related to the repayment of debt from the proceeds of the 2012 term loan under the May 15, 2012 Credit Agreement, as follows:



	Three Months Ended		Nine Months Ended
	September 30, 2012		September 30, 2012
Premium payment to redeem/purchase Wendy’s Restaurants 10.00% Senior Notes due in 2016 (the “Senior Notes”)	$	33,058	$	43,151
Unaccreted discount on the Senior Notes	7,186		9,272
Deferred costs associated with the Senior Notes	9,637		12,433
Unaccreted discount on the 2010 term loan	—		1,695
Deferred costs associated with the 2010 term loan	—		8,525
Loss on early extinguishment of debt	$	49,881	$	75,076

The Credit Agreement includes a revolving credit facility which includes a sub-facility for the issuance of up to $70,000 of letters of credit. The Restated Credit Agreement also allows Wendy’s to have liens in the form of cash collateralized letters of credit up to an additional $40,000. During the three months ended September 29, 2013, Wendy’s transitioned the security for all of its outstanding letters of credit from the revolving credit facility to cash collateral. As of September 29, 2013, Wendy’s had outstanding cash collateralized letters of credit of $22,593. The related cash collateral is classified as restricted cash and included in “Prepaid expenses and other current assets” in the condensed consolidated balance sheet as of September 29, 2013.

On September 24, 2013, Wendy’s entered into an amendment (the “Amendment”) to its Restated Credit Agreement to borrow additional Term A Loans (“Incremental Term Loans”) in an aggregate principal amount up to $225,000. As a result of the execution of the Amendment, the outstanding Wendy’s 6.20% Senior Notes due in 2014 (the “6.20% Senior Notes”) have been classified as long-term debt in our condensed consolidated balance sheet as of September 29, 2013. The Amendment does not contain any material changes to existing covenants or other terms of the Restated Credit Agreement, except as described above. During the three months ended September 29, 2013, Wendy’s incurred $2,293 in fees related to the refinancing, which have been capitalized and included in “Deferred costs and other assets” in the condensed consolidated balance sheet. The interest rates on Term A Loan and Term B Loan were 2.43% and 3.25%, respectively, as of September 29, 2013.

Subsequent Events

On October 24, 2013, Wendy’s borrowed $225,000 of Incremental Term Loans under the Amendment, further described above. Proceeds from the Incremental Term Loans, plus cash on hand, were used to redeem all amounts outstanding on the aggregate principal amount of the 6.20% Senior Notes at a price equal to 103.8%, as defined in the 6.20% Senior Notes and accrued and unpaid interest to the redemption date. In connection with the redemption of the 6.20% Senior Notes, during the fourth quarter we terminated the related interest rate swaps with notional amounts totaling $225,000 which had been designated as fair value hedges. Consequently, during the fourth quarter of 2013, Wendy’s will recognize a loss on the early extinguishment of debt of approximately $7,544 which will primarily include (1) a premium payment, as defined in the 6.20% Senior Notes, totaling $8,439, (2) the remaining $3,168 of the fair value adjustment previously recorded in connection with the Wendy’s merger, partially offset by (3) a $4,063 benefit from the cumulative effect of our fair value hedges.